Eat More Wings, LLC et al v. Home Market Foods, Inc.

Filing 58

OPINION: In sum, the Court holds that the above quoted requests by the defendant to Tierney asking him to send samples of his sauce and spices, which defendant then allegedly stole and from which it is now deriving substantial revenue from Kentucky customers, satisfy the above jurisdictional criteria (See Opinion for details). Signed by Judge William O. Bertelsman on 10/10/2017.(ECO)cc: COR

TO BE PUBLISHED IN F. SUPP.2D
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION AT COVINGTON

CIVIL ACTION NO. 2:17-cv-07 (WOB-CJS)
EAT MORE WINGS, LLC, ET AL

PLAINTIFFS

VS.

OPINION
DEFENDANT 

HOME MARKET FOODS, INC.

INTRODUCTION
This matter came before the Court on the motion of the
defendant Home Market Foods, Inc. (“HMF”) to dismiss for lack of
personal

jurisdiction.

(Doc.

13).

Following

a

period

of

jurisdictional discovery, oral argument was held on August 29,
2017.

Following argument, the Court announced its decision to

deny the motion to dismiss, stating that it would file a written
opinion setting forth its rationale for concluding that personal
jurisdiction existed.

(Doc. 51).

Having studied this matter further, the Court now issues the
following opinion.
FACTS
The basic jurisdictional facts are, for the most part, not
disputed, although the conclusions to be drawn therefrom are hotly
contested.

According to the pleadings and his declaration, the plaintiff
Timothy Tierney, acting individually and through his wholly owned
company, Eat More Wings, LLC1,   developed formulae for a unique dry
rub and a liquid spice for chicken wings, which he desired to
market.

(Tierney Decl. ¶ 2).

(Doc. 21).

At that time, Tierney

was a Kentucky citizen.
In

2013,

Tierney’s

nephew

put

him

in

touch

with

a

representative of The Kroger Company to discuss the possibility of
Kroger

selling

chicken

(Tierney Decl. ¶ 3).

wings

containing

Tierney’s

spices.

After sampling Tierney’s spices, Kroger

expressed interest in purchasing Tierney’s products.
In June 2015, Tierney began working with HMF’s research and
development team to commercially produce chicken wings containing
his spices for sale at Kroger and other retailers.

(Tierney Decl.

¶ 7).2
A

course

of

negotiations

and

discussions

cooperation among these parties ensued.
conversations were exchanged.

of

possible

Many emails and phone

During some of these exchanges,

Tierney was in Florida, where he had a residence and where he was
considering moving.

1

Tierney did not actually incorporate Eat More Wings as a Kentucky
limited liability company until June 22, 2015.
2

HMF is a Delaware corporation with its principal place of
business in Massachusetts. It manufactures frozen foods and
sells them to grocery store chains, including Kroger.
2

In January 2016, Tierney did move to Florida while also
maintaining a home in Northern Kentucky.

He resided in both

places, but at some point in early to mid-2016, he established
citizenship in Florida for both himself and his LLC.
On February 22, 2016, Tierney sent HMF a draft licensing
agreement listing his Kentucky address and including a Kentucky
choice of law provision.

(Tierney Decl. ¶ 18, Exh. C).

The

parties continued to negotiate and, on March 29, 2016, HMF sent
Tierney a revised agreement identifying Eat More Wings as a
Kentucky LLC and listing Tierney’s Kentucky address under the
signature

line,

provision.

but

employing

a

Massachusetts

(Tierney Decl. ¶ 23, Exh. F).

established the LLC as a Florida entity.
Ultimately,

HMF

discontinued

choice

of

law

That same day, Tierney
(Tierney Decl. ¶ 24).

negotiations

and

commenced

marketing chicken wings — made with the spices allegedly stolen
from

Tierney

—

through

grocery

stores,

including

Kroger.

(Complaint ¶ 42) (Doc. 1-1 at 12).
Tierney’s declaration sets out a series of emails with HMF
beginning in March, 2015 and extending to February, 2016.
drafts of a marketing agreement were exchanged.

Several

During this

exchange of emails Tierney was sometimes in Kentucky and sometimes
in Florida.
The
sufficient

Court
to

considers
establish

the

following

personal
3

transactions

jurisdiction

over

to

be

HMF

in

Kentucky, although it seems that some of the emails were sent to
and returned from Florida:


On June 23, 2015, HMF Research and Development Supervisor
Srividya Sreeram (“Vidya”) emailed Tierney: “The 10lbs of
Chicken Wing Seasoning 107195 was delivered this afternoon.
Thank you. Please send us the processing details at the
earliest – we have the raw materials in house to start
working on this.” (Doc. 21 at 15).



On June 24, 2015, Vidya emailed Tierney: “I also wanted to
ask you if you’ll send any maple sriracha flavoring for us
to work with? (Doc. 21 at 14).



On July 2, 2015, Vidya emailed Tierney: “Could you please
send us another 10 lbs. of the seasoning, with a 50%
reduction in salt? Also could you please let me know when
you’ll be sending us the sriracha/maple glaze?” (Doc. 21
at 13).



On July 2, 2015, Tierney replied: “I am back in Kentucky
and have got all the ingredients . . . . I just need to
mix and find a proper container to send to you. I promise
to do it this weekend.” (emphasis added). In the same
email Tierney asked why HMF wanted a 50% reduction in salt.
(Id.).



On July 2, 2015, Vidya replied, explaining
reduction in salt was requested. (Id.).



On July 8, 2015, Tierney emailed Vidya from Kentucky to
tell him that Tierney was sending him a container of the
sriracha/maple glaze. (Doc. 21 T 12).



On July 8, 2015, Vidya replied to Tierney, thanking him,
and saying: “Could you please send me the finished
products, both original and sriracha maple?
This would
help us with the size of the wings, as well as the flavors.”
(Id.).

why

the

Tierney’s declaration states that negotiations continued but
HMF unilaterally broke them off and then appropriated his formulae,

4

independently marketing substantial quantities of chicken wings
using his purloined secret recipes as early as May 2016.
Decl. ¶ 29).
chicken

wing

(Tierney

Defendant admits that it widely distributes the
products

in

question

through

Kroger

stores

in

Kentucky.
ANALYSIS
A. Personal Jurisdiction Analysis in Kentucky
In 1962, the Commissioners on Uniform Laws promulgated the
Uniform Interstate and International Procedure Act, addressing the
recommended approach to determining personal jurisdiction over
foreign defendants.

See 4 Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure § 1068 (4th ed. 2013).

This Act

became a model for states in developing their long-arm statutes.
Kentucky’s version is found in KRS 454.210.
As pertinent here, that statute reads:
(2)(a) A court may exercise personal jurisdiction over a
person who acts directly or by an agent, as to a claim arising
from the person’s:
1. Transacting any business in this Commonwealth;
* * * *
3. Causing tortious injury by an act or omission in this
Commonwealth;
4. Causing tortious injury in this Commonwealth by an
act or omission outside this Commonwealth if he
regularly does or solicits business, or engages in any
other
persistent
course
of
conduct, or derives
substantial revenue from goods used or consumed or
services rendered in this Commonwealth, provided that
5

the tortious injury occurring in this Commonwealth
arises out of the doing or soliciting of business or a
persistent
course
of
conduct
or
derivation
of
substantial revenue within this Commonwealth.
KRS 454.210 (emphasis added).
Following the widespread adoption of this uniform statute,
many states took the view that the statute was coterminous with
due process; that is, that the wording of the statute did not need
to be construed. Rather, only a due process analysis was required.
See 4A Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 1069 (4th ed. 2013) (listing jurisdictions using
this “one step inquiry”).

Kentucky was among this group.

See,

e.g., Wilson v. Case, 85 S.W.3d 589, 592 (Ky. 2002) (personal
jurisdiction

analysis

turns

on

single

inquiry

of

whether

jurisdiction offends due process), overruled by Caesars Riverboat
Casino, LLC v. Beach, 336 S.W.3d 51 (Ky. 2011).
However, in Caesars, the Supreme Court of Kentucky changed
this approach.

There, the plaintiff was a Kentucky citizen who

was a patron at a casino located in Indiana.
at 53.

Caesars, 336 S.W.3d

She slipped on butter on the floor at the casino buffet

and was injured.

She then brought suit for her injury in state

court in Kentucky, basing personal jurisdiction on widespread
advertising the casino did in Kentucky to attract customers, as
well

as

on

other

activities

in

Kentucky.

6

which

the

casino

engaged

in

The Supreme Court of Kentucky held that the long-arm statute
could no longer be construed as being coterminous with due process.
Id. at 55-57.

Rather, the conditions set forth in the statute had

to be met before due process could be considered.

Id. at 57 (court

must first determine “if the cause of action arises from conduct
or activity of the defendant that fits into one of the statute’s
enumerated categories;” if not, then “in personam jurisdiction may
not be exercised”).
B. The Kentucky Long-Arm Statute
Jurisdiction in this Case.

Provides

for

Personal

a. Transacting Any Business
Under the “transacting any business” prong of the Kentucky
long arm statute, the “use of the word ‘any’ . . . establishes
that even the slightest transaction is sufficient to bring a
corporation within [the forum’s] long-arm jurisdiction.”

Beydoun

v. Wataniya Rests. Holding, Q.S.C., 768 F.3d 499, 504-05 (6th Cir.
2014) (emphasis added).3

Making phone calls, sending facsimiles,

sending e-mails, letters or other communications, standing alone,
“may be sufficient to confer jurisdiction on the foreign defendant
where the phone calls and faxes form the bases for the action.”
Rice v. Karsch, 143 F. App’x 454, 460 (6th Cir. 2005) (quoting
Neal v. Janssen, 270 F.3d 328, 332 (6th Cir. 2001)).

3

In Beydoun, the Sixth Circuit was construing the Michigan long
arm statute, which has the same “transacting any business” prong
as the Kentucky statute.
7

As stated above, the defendant sent emails to Tierney, knowing
that

he

was

instructions
Kentucky.

in
for

Kentucky,
his

asking

products,

him

which

to

send

Tierney

samples

fulfilled

and
from

This constituted transacting business in Kentucky and

the plaintiff’s claims arise from these actions.
b. Causing Tortious Injury in this Commonwealth
There is a second ground for satisfying the Kentucky longarm statute in this case. Under § 454.210(2)(a)(4), personal
jurisdiction is proper if a defendant has:
Caus[ed] tortious injury in this Commonwealth by an act or
omission outside this Commonwealth if he regularly does or
solicits business, or engages in any other persistent course
of conduct, or derives substantial revenue from goods used or
consumed or services rendered in this Commonwealth, provided
that the tortious injury occurring in this Commonwealth
arises out of the doing or soliciting of business or a
persistent course of conduct or derivation of substantial
revenue within the Commonwealth.
KY. REV. STAT. § 454.210(2)(a)(4) (emphasis added).
To

be

subject

to

personal

jurisdiction

under

§

454.210(2)(a)(4), a defendant must (1) have caused a tortious
injury in Kentucky, that (2) arises out of defendants’ activities
in

conducting

business,

soliciting

business,

or

deriving

substantial revenue from business in Kentucky, (3) provided the
conducting, soliciting, or deriving substantial revenue set out in
subsection (2) is persistent. See Fin. Ventures v. King, 131 F.
Supp. 3d 677, 685–86 (W.D. Ky. 2015).

8

The

context

of

the

communications

between

defendant

and

plaintiff makes clear that there was an understanding that, if
defendant used plaintiff’s spice or sauce, it would pay for it.
Of course, the defendant may assert that it did not use plaintiff’s
formulae, but developed its own seasonings independently.

If so,

this defense can be raised at a later date.
But at this time, it is clear that this subdivision of the
statute provides for personal jurisdiction over the defendant.

By

allegedly stealing the recipe of a Kentucky resident and deriving
benefit from that recipe, HMF thus caused some harm to a Kentucky
resident with its sales of chicken wings to Kroger in early 2016,
regardless of where those wings ended up or where the transaction
took place. See Fin. Ventures, 131 F. Supp. 3d at 685 (holding
that a tortious injury occurred in Kentucky because plaintiff
resided in Kentucky, in addition to having its principal place of
business in Kentucky). Also, Kroger sent 14,663 packages of HMF
chicken wings to its Kentucky-related distribution centers over an
18-month period between January 2016 and June 2017.
Kroger’s purchase of those packages generated nearly $200,000
in revenue for HMF.

See Beverly Hills Fan Co. v. Royal Sovereign

Corp., 21 F.3d 1558, (Fed. Cir. 1994) (applying similar portion of
Virginia long arm statute and holding that sales made in forum
state

through

distributors

constituted

“substantial

revenue”

attributable to defendant manufacturer); Bay Tobacco, LLC v. Bell
9

Quality Tobacco Products, LLC, 261 F. Supp.2d 483, (E.D. Va. 2003)
(defendant cigarette manufacturer derived substantial revenue from
sales of its cigarettes in Virginia made through distributors).
Thus, the Court concludes that HMF is subject to personal
jurisdiction under this prong of the Kentucky long arm statute as
well.
c. Due Process
As

explained

above,

resolving

an

issue

of

personal

jurisdiction in Kentucky now involves an analysis of both the
Commonwealth’s long-arm statute and of due process.
The landmark due process case has been, and remains, Burger
King Corp. v. Rudzewicz, 471 U.S. 462 (1985).

That opinion sets

forth many precedents and a lengthy discussion of due process
principles in the long-arm context.

The essential holding of the

case, however, was succinctly stated:
Where a forum seeks to assert specific jurisdiction over an
out-of-state defendant who has not consented to suit there,
[jurisdiction exists] if the defendant has “purposefully
directed” his activities at residents of the forum . . . and
the litigation results from alleged injuries that “arise out
of or relate to those activities.”
Id. at 472 (internal quotations omitted).

In support of this

holding the Court cited Keeton v. Hustler Magazine, 465 U.S. 770,
774 (1984) (personal jurisdiction in a libel suit lies where an
offending publication was distributed in the forum state).

10

Accord

Calder v. Jones, 465 U.S. 783 (1985).

Cf. Daimler AG v. Bauman,

134 S. Ct. 746, 755 n.7 (2014) (citing cases).
The Court further observed that “[j]urisdiction is proper .
. . where the contacts proximately result from actions by the
defendant himself that create a ‘substantial connection’ with the
forum State,” or where the defendant “has created ‘continuing
obligations’

between

himself

and

residents

of

the

forum.”

Rudzewicz, 471 U.S. at 475-76 (citations omitted).
The facts in this case satisfy these criteria.

Defendant,

knowing that Tierney was in Kentucky, at least twice requested
that he prepare and ship to defendant’s out-of-state headquarters
recipes for Tierney’s sauce and spice for chicken wings.

This was

followed by a lengthy series of negotiations which ended when the
defendant allegedly stole the recipes and used them in their
products.

Thus, the defendant itself “created a substantial

connection with the forum State.”

Id.

Defendant subsequently

marketed the allegedly fraudulently obtained recipes in the forum
state, through retailers, including Kroger.
As the Rudzewicz Court observed:
[T]he forum State does not exceed its powers under the Due
Process Clause if it asserts personal jurisdiction over a
corporation that delivers its products into the stream of
commerce with the expectation that they will be purchased by
consumers in the forum State and those products subsequently
injure forum consumers.
Id. at 473 (citation and internal quotations omitted).

11

Although consumers here were not injured, if plaintiff’s
allegations are true, every sale of defendant’s product in Kentucky
(as well as other states) causes injury to plaintiff and his LLC.
The Sixth Circuit has consistently applied these principles
over the years in many cases, as early as Southern Machine Co. v.
Mohasco Ind., Inc., 401 F.2d 374 (6th Cir. 1968).

See also Beydoun

v. Wataniya Rests. Holding, Q.S.C., 768 F.3d 499, 505-08 (6th Cir.
2014) (discussing Mohasco and other cases).
In

a

slightly

different

context,

the

Supreme

Court

has

reiterated that a company that places products in the stream of
commerce can be sued on claims arising out of sales of the products
in every state where the defendant reasonably anticipates they
will be distributed.

World-Wide Volkswagen Corp. v. Woodson, 444

U.S. 286, 297-98 (1980).
As stated in Mohasco:
First, the defendant must purposefully avail himself of the
privilege of acting in the forum state or causing a
consequence in the forum state. Second, the cause of action
must arise from the defendant’s activities there. Finally,
the acts of the defendant or consequences caused by the
defendant must have a substantial enough connection with the
forum state to make the exercise of jurisdiction over the
defendant reasonable.
Mohasco, 401 F.2d at 381.
In the Sixth Circuit, the emphasis on the purposeful availment
inquiry is “whether the defendant has engaged in some overt actions

12

connecting the defendant with the forum state.”

Beydoun, 768 F.3d

at 506 (citation and internal quotation omitted).
In sum, the Court holds that the above quoted requests by the
defendant to Tierney asking him to send samples of his sauce and
spices, which defendant then allegedly stole and from which it is
now deriving substantial revenue from Kentucky customers, satisfy
the above jurisdictional criteria.4

This 10th day of October, 2017.

4

It should be noted that this is not a products liability “stream
of commerce” case. Rather, the Court relies on the defendant’s
purposely acting in Kentucky and causing a result there by its
requests knowingly directed into Kentucky for samples of
plaintiffs’ products.   
13